| Overseas Private Inv. Corp. v Nam Koo Kim |
| 2010 NY Slip Op 00437 [69 AD3d 1185] |
| January 21, 2010 |
| Appellate Division, Third Department |
| Overseas Private Investment Corporation, Respondent, v Nam KooKim et al., Appellants. |
—[*1] Linda T. Taverni, Chestertown, for respondent.
Kavanagh, J. Appeal from an order of the Supreme Court (Lynch, J.), entered May 26, 2009in Albany County, which, among other things, partially granted plaintiff's motion for summaryjudgment.
In February 2005, defendant Nam Koo Kim (hereinafter the husband), as sole owner ofMajestic Group Korea Ltd., entered into a loan agreement on behalf of the company withplaintiff to borrow $1,500,000 for the purposes of financing a "Ruby Tuesday" restaurant inSouth Korea. The husband and his wife, defendant Hee Sun Kim (hereinafter the wife), issuedpersonal guaranties for the loan.[FN*]In October 2005, Majestic defaulted on the loan and a restructured loan and assumptionagreement was executed by the parties and included a promissory note by the husband to payplaintiff $1,517,000 in the event of a default. Once again, the wife agreed to personally guarantythe terms of the note and signed a written commitment to that effect. When the borrowersdefaulted on the restructured loan, plaintiff, as was its right under the agreement, acceleratedpayments of the promissory note and commenced this action seeking recovery of the amount dueunder the note, together with interest and counsel fees. Plaintiff moved for summary judgmentand Supreme Court found that the husband was liable for the payment of the promissory note heexecuted and that the wife was liable pursuant to the personal guaranty she executed inconnection with this note. The court denied plaintiff's motion as to the amount claimed to beowed and directed that an inquest be conducted to determine plaintiff's damages and counselfees. Defendants now appeal.
The principal contention raised by defendants on this appeal is the extent of the wife'scommitment to guaranty the payment of the promissory note executed by her husband inconnection with the original and restructured loan agreements. While the wife admits signing theguaranty, she claims that it was her understanding that her exposure was limited to the value ofher interest in real property she owned in Virginia. She denies ever reading or even seeing theentire guaranty agreement and contends that plaintiff only provided her with the page of theagreement that bore her signature. Given that assertion, defendants argue that a question of facthas been created as to the scope of the wife's guaranty and Supreme Court erred by grantingplaintiff summary judgment. We do not agree.
A party is entitled to a judgment on a guaranty of a note if it proves that there has been adefault on the payment of a promissory note and the party against whom judgment has beensought has executed a valid guaranty warranting the payment of the amount due under that note(see Agai v Diontech Consulting,Inc., 64 AD3d 622, 623 [2009]; Verela v Citrus Lake Dev., Inc., 53 AD3d 574, 575 [2008]; Smith v Shields Sales Corp., 22 AD3d942, 944 [2005]; Judarl v Cycletech, Inc., 246 AD2d 736, 737 [1998]; see also Hirsh v Brunenkant, 51 AD3d1258, 1259 [2008]). Here, plaintiff submitted documentary evidence establishing that thewife gave a written commitment guarantying the obligation created by the promissory note thatis in default. Upon such a showing, it was incumbent upon defendants to avoid the entry ofsummary judgment to establish the existence of a bona fide defense, that the wife, despite theterms of her guaranty, is not legally obligated to pay the debt created by the promissory note(see Verela v Citrus Lake Dev., Inc., 53 AD3d at 575; Hirsh v Brunenkant, 51AD3d at 1259).
In her defense, the wife argues that when she signed the guaranty she was only providedwith the last page of the agreement and claims to have been told that her liability under theguaranty was limited to the value of her real property interest in Virginia. However, she admitsthat she did not participate in the negotiations that led up to the issuance of the promissory noteand that it was her husband who asked her to sign the guaranty agreement. While the husbandechoes the wife's claim that she signed the guaranty agreement without seeing the entiredocument, he does not deny that, at the time, he was in possession of the entire agreement. Inaddition, he provides no confirmation of his wife's assertion that when she signed the guarantyagreement she was told that her legal obligation was limited to the value of her real estateinterest in Virginia. In addition, the terms of the guaranty are clear on its face and specificallyprovide that the wife has guarantied full payment of the promissory note. In fact, immediatelyabove the wife's signature is an acknowledgment to the effect that she "has received a copy ofthis Restructured Loan Deferral Letter, agrees to all terms and conditions hereof, and confirmsthat the Personal Guaranty is, and remains, in full force and effect." In short, the wife'scontention that it was her understanding that she was providing a limited commitment in regardto the payment of the promissory note is belied by what is clearly set forth in the document and,"[i]n the absence of fraud, duress or some other wrongful act by a party to a contract, a signer ofan agreement is deemed to be conclusively bound by its terms whether or not he or she read it"(see Maines Paper & Food Serv. v Adel, 256 AD2d 760, 761 [1998]). Thewife—who by her own admission had no contact with plaintiff in regard to thistransaction—has presented no documentary evidence to support the conclusion thatplaintiff used duress or fraud to procure her signature on this document. As such, she is bound bythe terms of her guaranty.
Nor are we convinced that defendants have made an "evidentiary showing suggesting thatcompletion of discovery will yield material and relevant evidence," and that summary judgmentshould have been denied at this stage of the action (Zinter Handling, Inc. v Britton, 46 AD3d 998, 1001 [2007]).Specifically, defendants sought to uncover evidence that plaintiff had only provided the wifewith a blank signature page of the guaranty agreement and that different versions of theagreement actually exist that would in some way negate the validity of the wife's guaranty. Inthat regard, the wife specifically seeks additional information as to how the guaranty documentswere transmitted to her and points to an e-mail as support for her contention that she was sentonly the page of the agreement that bears her signature. However, the e-mail in question simplyrequests that the wife "execute the guaranty agreement and send in the signature page soon to[plaintiff]." The fact that plaintiff only sought return of the signature page does not, as the wifecontends, establish that the entire agreement was not initially provided to her and, as previouslynoted, the husband was in possession of the entire agreement when the wife signed the documentat his urging. As such, Supreme Court did not abuse its discretion in denying defendants'application that they be permitted to engage in additional discovery prior to issuing a decision onplaintiff's motion for summary judgment (see Stoian v Reed, 66 AD3d 1278, 1281 [2009]).
Peters, J.P., Lahtinen, Malone Jr. and Stein, JJ., concur. Ordered that the order is affirmed,with costs.
Footnote *: Majestic Group Korea, Ltd. is awholly owned subsidiary of Majestic Group, Inc. Majestic Group, Inc. also guarantied the loan.